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The Figure Given Below Shows the Demand for Permits and the Maximum

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The figure given below shows the demand for permits and the maximum permissible level of pollution. Figure 13.4 The figure given below shows the demand for permits and the maximum permissible level of pollution. Figure 13.4   In the figure, The downward sloping line is the demand curve of permits; The vertical line denotes the maximum permissible limit of pollution. Refer to Figure 13.4.Suppose the government wishes to reduce pollution to a quantity of Q<sub>b.</sub>If it sells marketable pollution permits at a quantity of Q<sub>b </sub>then: A) firms will bid the price of the permits up to a price of P<sub>a</sub>, and Q<sub>a</sub> pollution will result. B) firms will bid the price of the permits up to a price of P<sub>b</sub>, and Q<sub>b </sub>pollution will result. C) firms will bid the price of the permits up to a price of P<sub>c</sub>, and Q<sub>c</sub> pollution will result. D) firms will bid the price of the permits up to a price of P<sub>c</sub>, and Q<sub>b </sub>pollution will result. E) firms will not be willing to pay a price for the permits, so no pollution will be reduced. In the figure,
The downward sloping line is the demand curve of permits;
The vertical line denotes the maximum permissible limit of pollution.
Refer to Figure 13.4.Suppose the government wishes to reduce pollution to a quantity of Qb.If it sells marketable pollution permits at a quantity of Qb then:


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